Bill Text: CA AB1550 | 2009-2010 | Regular Session | Chaptered

California Assembly Bill 1550 (Prior Session Legislation)

Bill Title: Department of Water Resources: refunding bonds.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Passed) 2009-08-06 - Chaptered by Secretary of State - Chapter 154, Statutes of 2009. [AB1550 Detail]

Download: California-2009-AB1550-Chaptered.html

BILL NUMBER: AB 1550	CHAPTERED
	BILL TEXT

	CHAPTER  154
	FILED WITH SECRETARY OF STATE  AUGUST 6, 2009
	APPROVED BY GOVERNOR  AUGUST 5, 2009
	PASSED THE SENATE  JULY 9, 2009
	PASSED THE ASSEMBLY  MAY 14, 2009
	AMENDED IN ASSEMBLY  APRIL 15, 2009

INTRODUCED BY   Committee on Banking and Finance (Nava (Chair),
Evans, Fong, Fuentes, Mendoza, Ruskin, Swanson, and Torres)

                        MARCH 10, 2009

   An act to amend Section 80130 of the Water Code, relating to
electricity.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1550, Committee on Banking and Finance. Department of Water
Resources: refunding bonds.
   Existing law authorizes the Department of Water Resources to
administer contracts entered into before January 1, 2003, for the
purchase of electricity, and to sell electricity to retail end-use
customers and, with certain exceptions, local publicly owned
utilities, at not more than the department's acquisition costs.
Existing law requires the department to recover those costs through
the issuance of bonds, in an amount up to $13,423,000,000, or as
otherwise specified, to be repaid by ratepayers. Existing law
authorizes the department to refund those bonds and specifies that
the refunding of bonds to obtain a lower interest rate is not subject
to the aggregate amount of bonds authorized to be issued.
   This bill would grant additional authority to the department to
refund those bonds, including the authority to refund bonds bearing a
variable interest rate with bonds bearing interest at a fixed
interest rate and to refund bonds if a national recognized rating
agency reduces or withdraws, or proposes to reduce or withdraw, the
rating assigned to specified securities. The bill would specify that
refunding bonds issued by the department pursuant to this program
before January 1, 2010, are deemed to have been issued for one or
more of these authorized purposes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 80130 of the Water Code is amended to read:
   80130.  (a) The department may incur indebtedness and issue bonds
as evidence thereof, provided that bonds may not be issued in an
amount the debt service on which, to the extent payable from the
fund, is estimated by the department to exceed the amounts estimated
to be available in the fund for their payment.
   (b) The department may authorize the issuance of bonds (excluding
notes issued in anticipation of the issuance of bonds and retired
from the proceeds of those bonds) in an aggregate amount up to the
greater of thirteen billion four hundred twenty-three million dollars
($13,423,000,000) or the amount calculated by multiplying by a
factor of four the annual revenues generated by the California
Procurement Adjustment, as determined by the commission pursuant to
Section 360.5 of the Public Utilities Code if the aggregate amount
does not exceed thirteen billion four hundred twenty-three million
dollars ($13,423,000,000).
   (c) This section does not prohibit the department from issuing
bonds prior to the effective date of this bill based upon the
authorization granted to the department by the provisions of Chapter
4 of the Statutes of 2001-02 First Extraordinary Session.
   (d) (1) Refunding bonds for any of the following purposes shall
not be included in the calculation of the aggregate amount:
   (A) Refunding bonds to obtain a lower interest rate.
   (B) Refunding bonds bearing a variable interest rate with bonds
bearing interest at a fixed interest rate.
   (C) Refunding bonds if any nationally recognized rating agency
reduces or withdraws, or proposes to reduce or withdraw, the rating
assigned to securities that are secured by bond insurance policies,
credit or liquidity facilities issued by the provider of a bond
insurance policy, or a credit or liquidity facility securing the
bonds being refunded.
   (2) All refunding bonds issued by the department under this
chapter before January 1, 2010, shall be deemed to have been issued
for one or more purposes described in this subdivision and shall not
be included in the calculation of the aggregate amount.
   (e) In addition, before the issuance of bonds in a public
offering, the department shall establish a mechanism to ensure that
the bonds will be sold at investment grade ratings and repaid on a
timely basis from pledged revenues. This mechanism may include, but
is not limited to, an agreement between the department and the
commission as described in Section 80110.